NEW DELHI: Many Vodafone Idea Limited (VIL) customers are porting to the state-owned Bharat Sanchar Nigam Limited (BSNL) following a tariff increase by telecom companies in July 2024, said Vodafone Idea's Chief Executive Officer, Akshaya Moondra.
Moondra, during the Q1 earnings conference call, noted that the reason for this migration is that BSNL has not raised its tariffs. However, he expressed that while Vodafone Idea’s customers might have initially switched providers due to the tariff hike, they are likely to return after experiencing differences in coverage and 4G service quality. In July 2024, private telecom operators raised tariffs by up to 25% for postpaid and prepaid plans.
“One of the trends we have seen is that the port-out to BSNL has generally increased from the pre-tariff increase levels, which is a space that we are watching,” said Moondra.
The debt-laden telecom reported a consolidated net loss of ₹6,432 crore, compared to a net loss of ₹7,840 crore in the same period last year. Revenue decreased by 1.3% to ₹10,508.3 crore.
The company is also expecting to finalize new long-term contracts for 4G expansion and 5G deployment with Nokia, Ericsson, Samsung, and Mavenir within a month. It has already placed initial orders for 4G equipment using funds raised through a follow-on public offer (FPO) in April. The company raised ₹18,000 crore through this offer, the largest such fundraising in the country. For the long-term contracts, the company is negotiating with European telecom equipment vendors Ericsson and Nokia, Korea's Samsung, and US-based Mavenir.
In June, the board approved the issuance of preferential shares worth ₹1,520 crore to Nokia Solutions and ₹938 crore to Ericsson India, totaling ₹2,458 crore, with shares issued at ₹14.8 apiece.
Moondra also mentioned that Vodafone Idea is in discussions with its vendor partners to finalize contracts for regions where equipment from Chinese manufacturers Huawei and ZTE is deployed. “We also have many circles with Chinese equipment where 5G is not allowed. So, that is part of the discussion on how to best address that. Longer discussions are in progress, and we are likely to conclude them soon, probably within the next month,” he said.